The Hawaiian flag is lowered from ʻIolani Palace in an elaborate annexation ceremony and replaced with the flag of the United States to signify the transfer of sovereignty from the Republic of Hawaii to the United States.

The Iolani Palace (Hawaiian: Hale Alii Iolani) was the royal residence of the rulers of the Kingdom of Hawaii beginning with Kamehameha III under the Kamehameha Dynasty (1845) and ending with Queen Liliuokalani (1893) under the Kalkaua Dynasty, founded by her brother, King David Kalkaua. It is located in the capitol district of downtown Honolulu in the U.S. state of Hawaii. It is now a National Historic Landmark listed on the National Register of Historic Places. After the monarchy was overthrown in 1893, the building was used as the capitol building for the Provisional Government, Republic, Territory, and State of Hawaii until 1969. The palace was restored and opened to the public as a museum in 1978. Iolani Palace is the only royal palace on US soil.

The flag of Hawaii (Hawaiian: Ka Hae Hawaiʻi) has previously been used by the kingdom, protectorate, republic, and territory of Hawaii. It is the only US state flag to include a foreign country's national flag. The inclusion of the Union Jack of the United Kingdom is a mark of the Royal Navy's historical relations with the Hawaiian Kingdom, particularly with King Kamehameha I. The flag continued to be used after the 1893 overthrow of the Hawaiian Kingdom.